Oatly(US:OTLY)2021-11-15 19:51Financial Data and Key Metrics Changes - For Q3 2021, the company reported record revenue of $171.1 million, a 49% increase compared to $114.7 million in Q3 2020 [20][59] - Gross profit for Q3 was $44.9 million, with a gross margin decrease of 510 basis points to 26.2% compared to 31.3% in the prior year [63] - The company expects revenue for fiscal year 2021 to exceed $635 million, representing a growth of over 51% compared to fiscal year 2020 [71] Business Line Data and Key Metrics Changes - The foodservice channel accounted for 35.8% of revenue in Q3 2021, up from 27.3% in the same period last year, while the retail channel accounted for 59.4%, down from 69.4% [61] - Finished goods volume produced was 131 million liters, a 77% increase from 74 million liters in the same period last year [20] Market Data and Key Metrics Changes - In the Americas, the company was approximately $3 million below its revenue plan for Q3 due to lower-than-expected production output at its Ogden facility [25] - In Asia, revenue was also approximately $3 million below plan, primarily due to COVID-19 related foodservice location closures [27] - EMEA revenue was approximately $1 million lower than expected due to a truck driver shortage in the UK [28] Company Strategy and Development Direction - The company is prioritizing growth investments over profitability to position itself for strong growth in the dairy alternatives market, which is estimated to be worth approximately $600 billion [12] - The company plans to open additional facilities in the U.S., U.K., and China in 2023, which are expected to add 450 million liters of finished goods capacity [53][57] - The company aims to have 50% to 60% of total volumes come from self-manufacturing to improve production and supply chain economics [56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential despite short-term headwinds impacting revenue growth [30][80] - The company anticipates that the challenges faced in Q3 will abate as it heads into 2022, with a strong long-term trajectory for the business [30] - Management highlighted the importance of maintaining a premium brand position and expects to retain pricing power despite inflationary pressures [103] Other Important Information - The company has opened new facilities in Ogden, Utah, and Singapore, with plans to open a second manufacturing facility in Asia [16][50] - The company has experienced an increase in trade costs due to the pandemic and supply chain disruptions, but expects localization of production to help offset these costs [64][66] Q&A Session Summary Question: Capacity expectations for next year - Management reiterated that the long-term outlook remains unchanged, with expectations for 1.075 billion liters of capacity in 2022, while monitoring supply chain disruptions [83][86] Question: Pricing power and inflationary pressures - Management acknowledged inflationary pressures but expects to compensate through price increases and optimization of product mix [101][102] Question: Shelf space and production issues - Management clarified that there were no losses in shelf space, but delays in distribution and production impacted expected growth [108][109] Question: Co-manufacturing capacity - Management discussed the potential for retaining more co-packing capacity and the competitive landscape for co-manufacturing [117][118]